How much should India prop up the rupee?

Last week, the rupee weakened against the dollar past the 81-mark to a record low. In recent months, the Reserve Bank of India (RBI) has been intervening in the forex market to smoothen the decline. With the RBI dipping into its kitty for this purpose, Indian foreign exchange reserves have fallen by about $94 billion in 12 months to about $545 billion until mid-September.  How much more forex can the RBI afford to use in reducing currency volatility? Does the benchmark interest rate, as a policy tool, have a role to play? Here we we discuss these questions.   Guests: Dharmakirti Joshi, Chief Economist, CRISIL Ltd; Lekha Chakraborty, Professor, NIPFP; and Member, Governing Board of Management of International Institute of Public Finance, Munich Host: K. Bharat Kumar